By Sruthi Gottipati
NEW DELHI (Reuters) - A prominent lawmaker allied with the Indian government was found guilty of corruption on Monday, a fresh blow for an administration that was widely lambasted last week for trying to protect convicted politicians in the run-up to elections.
Lalu Prasad Yadav, from the poverty-ridden state of Bihar, will be sentenced on Thursday for his part in an 1990s animal fodder racket in which millions of dollars went missing from state coffers.
If the court jails him for more than two years, Yadav would lose his seat in the lower house of parliament, making him the first to be hit by a Supreme Court ruling handed down in July that convicts may not sit in legislatures even during an appeal.
About 30 percent of lawmakers across federal and state assemblies have criminal charges against them, many of them for serious crimes such as murder, rape and kidnapping.
In a move critics say was designed to shield Yadav and other coalition allies, Prime Minister Manmohan Singh's cabinet hurriedly passed an executive order last week that would allow convicted lawmakers to stay in office and stand in an election.
Amid the outcry that followed, Rahul Gandhi - a contender for prime minister if his Congress party returns to power after the elections due by next May - slammed the cabinet move, a stunning intervention by the Nehru-Gandhi dynasty scion that embarrassed Singh and made his government look divided.
It may now be politically difficult for the government, which is already widely reviled for a string of corruption scandals on its watch, to ally itself with Yadav's Rashtriya Janata Dal (RJD) party going into the election.
No party is expected to emerge with enough lawmakers to rule on its own, which means coalition-building will be key to power.
"We are assessing the political situation in Bihar. Our options are open," said Shakeel Ahmad, a Congress leader, adding that the party may fight the election on its own in the eastern state, stick with Yadav's party or join hands with another.
One of India's most charismatic politicians, Yadav was chief minister of Bihar - a state that became a byword for violence, poverty and graft - in the 1990s.
He still enjoys huge popular support for championing "backward" castes and for his trademark humor that can make a budget speech in parliament sound like a stand-up routine.
It took more than a decade and a half for the fodder scam case to reach a verdict due to India's slow-moving courts. The public prosecutor said all 45 people charged were found guilty, and Yadav himself could face up to seven years in prison.
(Additional reporting By Nigam Prusty in New Delhi and Jatindra Dash in Bhubaneshwar; Editing by Nick Macfie)